BIS Fines Manufacturer for Antiboycott Violations

The Bureau of Industry and Security fined a United Arab Emirates company $283,500 for failing to report boycott requests in violation of BIS’ antiboycott regulations. Dubai-based Regal Beloit FZE, a subsidiary of U.S. manufacturer Regal Beloit America, didn’t report 84 requests from a Saudi Arabian customer to stop importing Israeli goods “in fulfillment” of the customer’s purchase order, BIS said.

Regal Dubai voluntarily self-disclosed the violations to BIS, cooperated with the agency’s investigation and took “remedial measures” after discovering the violations, leading to a “significant reduction in penalty.” The settlement is the first antiboycott enforcement action under new BIS policies rolled out in October, which set higher penalties for more serious violations, eliminated no-admit/no-deny settlements and made other changes.

“As this penalty makes clear, when foreign subsidiaries of U.S. companies violate U.S. antiboycott regulations, they will pay the price,” Matthew Axelrod, BIS’ assistant secretary for export enforcement, said in a statement May 18. He stressed that foreign subsidiaries need to report boycott requests even if they don’t plan to comply with them. “We aggressively punish violations of our antiboycott regulations by U.S. companies and their foreign subsidiaries, including failures to report boycott-related requests, no matter where in the world the underlying conduct occurs.”